COGS or billable expense for our unique situation?

One of the things our business does is offer branded promotional products/swag/merch—everything from t-shirts to drinkware, etc.

There are two scenarios:

1. Scenario #1 - client places an order with us for custom printed t-shirts. We order blank t-shirts from our supplier (purchase A), have them sent to our decorator to print (purchase B), and then deliver to our client. It could also happen that we order product and decoration from the same company and only get one bill.
2. Scenario #2 -  client places an order with us for custom embroidered hats. We order blank hats from our supplier (purchase A), we embroider them ourselves for a fee, and then deliver them to our client.

I should note as well, that in both scenarios, we quote, invoice, and await payment prior to placing any orders and we markup everything (case by case, no set figures or percentages).

Questions:

1. In Scenario #1: is buying the blank product (purchase A) considered COGS or billable expense? What about the decorator fee (purchase B)?
2. In Scenario #2: is the blank product COGS or billable expense? I already know the embroidery fee is simply "Sales" as we're providing a service, I just keep getting hung up on categorizing these other expenses properly.

Thanks for any help!